ABSTRACT

This study examines the impact of technological advancement on the operational efficiency of commercial banks in Buea, Cameroon, with a focus on National Financial Credit (NFC) Bank. Drawing on the Technology Acceptance Model (TAM) and the Resource-Based View (RBV) theory, the research investigates three key dimensions of technological advancement-digital banking services, automation, and data management technologies and their contributions to operational efficiency. A descriptive research design was employed, utilizing a purposive and convenience sampling technique to collect data from 30 bank employees through structured questionnaires.

Descriptive and inferential statistical analyses, including regression, were conducted to assess the relationships between technological variables and operational efficiency. The findings reveal that digital banking services significantly enhance transaction speed and reduce manual workloads, though technical issues such as app crashes persist.

Automation improves accuracy and staff productivity but faces challenges due to infrastructure limitations. Data management technologies bolster decision-making and fraud detection, yet synchronization and security concerns remain. Regression analysis confirms that these technological factors collectively explain 50.6% of the variance in operational efficiency. The study concludes that while technological adoption drives efficiency, addressing infrastructure gaps, staff training, and system reliability is critical for maximizing benefits.

CHAPTER ONE

INTRODUCTION

1.1. Background of the Study

The global banking sector has undergone a massive technological revolution in recent decades. According to the World Bank (2022), 76% of banks worldwide have adopted digital transformation strategies to improve efficiency and customer service. This shift has been driven by the need to reduce costs, enhance security, and meet changing customer expectations. Digital banking transactions globally reached $7.5 trillion in 2021, showing a 65% increase from 2019 (Statista, 2021). These changes reflect how technology is reshaping financial services across the world.

In Africa, the banking sector has shown remarkable growth in technology adoption. The African Development Bank (2021) reports that mobile banking users grew from 12% to 48% of the population between 2015 and 2020. Countries like Kenya and South Africa lead in digital banking innovation, with mobile money transactions worth $495 billion in 2020 (GSMA, 2021). However, challenges remain in infrastructure and digital literacy, with only 28% of Africans having access to formal banking services (World Bank, 2021). This shows both progress and gaps in Africa’s banking technology landscape.

Cameroon’s banking sector has been gradually adopting new technologies, though at a slower pace than some African neighbours. The Ministry of Finance (2022) reports that 35% of banking transactions in Cameroon are now digital, up from 15% in 2015. Mobile money usage has grown significantly, with 8 million users in 2022 compared to 3 million in 2017 (MTN Cameroon, 2022). However, cash still dominates many transactions, showing room for greater technology adoption. These statistics highlight Cameroon’s ongoing transition toward digital banking solutions.

Commercial banks in Buea face unique challenges in technology adoption. The city’s banking sector serves both urban and rural populations, creating diverse customer needs. A 2021 study by the University of Buea found that only 40% of bank customers regularly use digital services (Tambo & Nkeng, 2021). Infrastructure challenges like unstable electricity and internet affect service reliability. These factors influence how banks in Buea implement technological solutions compared to other regions.

Technological advancement in banking typically focuses on three key areas: digital banking services, automation, and data management. Digital banking includes mobile apps, online platforms, and electronic payments. Automation involves using software to handle repetitive tasks like account updates. Data management technologies help banks analyze customer information and detect fraud (OECD, 2020). These technologies work together to improve operational efficiency in modern banks.

Operational efficiency is crucial for banks to remain competitive and profitable. Efficient banks can process transactions faster, reduce errors, and lower operating costs. The IMF (2021) found that technologically advanced banks have 30% lower operational costs than traditional banks. In developing countries, efficient banks can better serve low-income customers and support economic growth. This makes technology adoption particularly important for banks in emerging markets like Cameroon.

Several studies have examined technology’s impact on banking efficiency globally. Research by Deloitte (2022) shows that banks using advanced technologies achieve 25% higher customer satisfaction scores. However, most studies focus on developed markets, leaving gaps in understanding African contexts. A few studies on Nigeria and Kenya show mixed results, with technology bringing benefits but also new challenges (Adeola & Evans, 2020). This suggests the need for Cameroon-specific research.

In Cameroon, previous research has mainly focused on mobile money rather than comprehensive banking technologies. A study by Nkwi and Ndi (2019) found that Cameroonian banks face unique regulatory and infrastructure challenges. Another study highlighted customer resistance to digital services due to security concerns (Mbaku, 2021). These findings suggest that technology adoption in Cameroonian banks may follow different patterns than in other markets.

The theoretical foundation for this study draws from technology acceptance models and efficiency theories. Davis’s (1989) Technology Acceptance Model explains how users adopt new technologies based on perceived usefulness. The Efficient Market Hypothesis suggests that technology should improve market operations (Fama, 1970). These theories help frame how technological advancement might affect banking efficiency in Buea’s specific context. This study aims to fill important knowledge gaps by examining how technological advancement affects commercial banks in Buea.

1.2. Problem Statement

The commercial banking sector in Cameroon has undergone significant technological transformation in recent years, with banks increasingly adopting digital banking platforms, automated processes, and advanced data management systems. While these innovations promise improved operational efficiency measured through faster transaction processing, reduced operational costs, and enhanced service quality their actual impact on banks in Buea remains uncertain.

Operational efficiency is a critical factor in determining the competitiveness and sustainability of financial institutions (Berger & Mester, 2003). However, despite technological investments, many banks in the region continue to face operational challenges, including delays in digital transactions, high overhead costs, and inefficiencies in data processing (Njie & Tande, 2020).

These inefficiencies suggest a potential disconnect between technological adoption and its effective implementation in the local banking context. For instance, while digital banking services such as mobile and online transactions are available, customers frequently report technical glitches and slow response times.

Similarly, automation tools designed to streamline workflows are not always fully utilized, leading to persistent manual interventions. Additionally, data management technologies, though present, may not be optimized to support real-time decision-making. These issues raise important questions about whether technological advancements are being leveraged to their full potential to enhance operational efficiency in Buea’s commercial banks.

This study aims to bridge this gap by investigating the relationship between technological advancement and operational efficiency, with a focus on three key variables: digital banking services, automation, and data management technologies.

 

 

 

1.3. Research Questions

1.3.1 Main Research Question

What is the impact of technological advancement on the operational efficiency of commercial banks in Buea?

1.3.2 Specific Research Questions

1. How do digital banking services influence the operational efficiency of commercial banks in Buea?
2. What is the impact of automation on the operational efficiency of commercial banks in Buea?
3. To what extent do data management technologies contribute to the operational efficiency of commercial banks in Buea?

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